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ECONOMY | Staff Reporter, Singapore
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Analysts cautiously raise GDP growth forecast for 2018

This is after Singapore GDP growth slowed down to 3.6% in Q4.

Singapore's GDP growth reached 3.6% YoY in Q4, lower than the 5.5% growth in Q3. Consequently, analysts raised their forecasts for the 2018 GDP, but not without caution.

Singapore Business Review previously reported that the government expects economic growth to slow down to a range of 1.5%-3.5% due to a slowdown in manufacturing.

UOB said manufacturing growth could slow down in 2018 after semiconductor sales growth had peaked in 2017.

The bank raised its growth forecast from 2.5% to 2.8%.

UOB economist Francis Tan said, "Risks in the horizon include potential trade protectionist measures from the US and upside inflationary surprises that could cause the Federal Reserve to be more hawkish that could result in tighter global financial conditions."

Standard Chartered was more optimistic and kept its expectations to around 3.2%. This is due to a high base effect and growth expected to broaden.

Sectors that have benefited from the electronics cycle face moderation due to a high cyclical base effect, whilst activity in weaker sectors bottoms out.

SC economist Jonathan Koh said, "Domestic activity may be supported by a spill-over from healthy external demand and improved labour and real-estate markets."

OCBC also retained its forecast of 2-4%, but remained watchful of potential policy tightening risks.

The bank cited domestic fiscal and monetary policy tightening, and a materialization of external trade protectionism concerns given the recent step-up in US’ trade rhetoric. 

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